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8 Building-Products Stocks Leading the Housing Recovery

Company profile: USG, with a market value of $2 billion, is a global manufacturer and distributor of building materials, including gypsum wallboard and ceilings as well as tile and flooring.

Investor takeaway: Its shares are up 78% this year and have a three-year, average annual return of 7%. Analysts give its shares three "buy" ratings, three "buy/holds," eight "holds," and two "weak holds," according to a survey of analysts by S&P.

S&P has it rated "buy," with a $25 price target, a 35% premium to its current price. S&P says the company "has solid long-term prospects" and after cleaning up its balance sheet, it had over $800 million of cash and equivalents as of year-end 2011.

Company profile: Armstrong, with a market value of $2.6 billion, operates three business units: flooring, building and cabinetry, for residential and commercial use.

Investor takeaway: Its shares are up 20% this year and have a three-year, average annual return of 54%. Analysts give its shares four "buy" ratings, one "buy/hold," six "holds," and one "weak hold," according to a survey of analysts by S&P. For fiscal 2012, analysts estimate it will earn $2.89 per share, and that will grow by 19% to $3.44 per share in 2013.

Company profile: Owens Corning, with a market value of $4 billion, is a glass fiber technology and composites provider for the commercial and residential building materials market. The company operates through two main segments: composites, which sells glass fiber materials, and building materials, which consists of insulation and roofing products.

Investor takeaway: Its shares are up 20% this year and have a three-year, average annual return of 24%. Analysts give its shares five "buy" ratings, six "buy/holds," and four "holds," according to a survey of analysts by S&P.

The company had a loss 38 cents per share in the first quarter on higher materials costs and layoffs, but it expects that the slowly improving U.S. housing market will help its building materials division, which saw revenue growth of 17% in the first quarter.

Company profile: A.O. Smith, with a market value of $3.5 billion, manufactures electric motors and water heaters used in residential and commercial temperature-control products and pumps. Customers include York International and Sears.

Dividend Yield: 1.34%

Investor takeaway: Its shares are up 19% this year and have a three-year, average annual return of 34%. Analysts give its shares seven "buy" ratings, three "buy/holds," and two "holds," according to a survey of analysts by S&P.

S&P has it rated "strong buy" with a $55 price target, a 13% premium to the current price. It says the company is aggressively expanding its presence in developing markets," particularly China, while maintaining "relatively predictable cash flows generated by replacement water heater sales."

Product Features:

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